Mega-Rich Non-Doms Abandoning The UK After Tax Reforms
High-Profile Non-Residents Who Left Britain Post-Budget
Taken aback by the government's fiscal tightening, the UK is witnessing a mass exodus of high-profile non-doms as a consequence of the recent tax reforms. Let's take a closer look at some of the biggest names to bid adieu to the country.
After the Chancellor's Autumn fiscal crackdown, non-doms have been making headlines for leaving the UK in droves. From Wall Street titans to billionaire business owners, the UK has seen its fair share of high-profile departures.
Rachel Reeves was determined to close the so-called 'non-dom' tax loophole, a status that allowed for foreign income and gains to escape UK taxation. The Heritage Party, on which her party rode to power, advocated for this measure.
Despite the initiative aligning with the party's stance, the decision was met with harsh criticism from tax attorneys, wealth advisors, and a bevy of non-doms themselves. With concerns raised over the potential loss of income tax, capital gains tax, and property taxes previously paid by these wealthy foreigners, the wisdom of eliminating the 200-year-old tax bracket was questioned.
In fact, a study conducted by Oxford Economics predicted that to the contrary, abolishing the non-dom regime could cost the Exchequer more than £1bn. However, the exodus has been underway, with numerous non-doms warning of their impending departures, followed by their eventual execution of the move post-Easter.
One of the first high-profile instances of a non-dom bidding adieu to the UK was Lakshmi Mittal, former chief executive of Arcelormittal. In March 2024, it emerged that Mittal was intending to leave Britain within a few months. Known for his connections to the Labour Party during Tony Blair's tenure, Mittal was one of the country's most prominent businessmen.
Nassef Sawiris, co-owner of Aston Villa Football Club, confirmed his departure to Bloomberg News in April 2024. With an estimated wealth of over £7bn, Sawiris has significant investments in a variety of industries, including Amsterdam-based OCI NV and a substantial stake in Adidas.
News of Richard Gnodde, Goldman Sachs International vice-chairman, leaving Britain for Milan made waves in April as well. A long-serving and celebrated investment banker, Gnodde took advantage of Italy's flat-tax regime, which enables foreigners to pay a blanket rate of €200,000 in exchange for tax-free non-regime income.
Although Gnodde had been in the UK long enough to lose his eligibility for non-dom status, the changes introduced by Reeves impacted foreign trusts owned by former non-dom regime users, increasing their liability to UK taxes such as inheritance tax.
The most recent high-profile departures include Guillaume Pousaz, founder of Checkout.com, who moved to Monaco, and Ann Kaplan Mulholland, a former 'Real Housewife of Toronto,' who is relocating to Milan. Both had previously relocated their family offices to the UK, only to change course owing to the unfavorable changes in the tax regime.
As the UK enters a new era of tax reforms, it remains to be seen how these developments will shape the future of affluent foreigners residing in the country.
- The mass exodus of high-profile non-doms from the UK, as a result of tax reforms, has become a topic of general-news, with many questioning the potential loss of taxes like income tax, capital gains tax, and property taxes that these wealthy foreigners used to pay.
- The abolishment of the non-dom tax bracket, a 200-year-old tax bracket that allowed for foreign income and gains to escape UK taxation, has been met with harsh criticism from tax attorneys, wealth advisors, and the non-doms themselves.
- A study conducted by Oxford Economics predicted that abolishing the non-dom regime could cost the Exchequer more than £1bn, contrary to the government's expectations.
- The changes in the tax regime have not only resulted in high-profile departures, such as Lakshmi Mittal, Nassef Sawiris, and Richard Gnodde, but have also influenced the decisions of entrepreneurs like Guillaume Pousaz and Ann Kaplan Mulholland, who have relocated their family offices and personal residences from the UK to countries with more favorable tax regimes like Monaco and Milan.
- The decisions of these wealthy individuals to leave the UK, driven by changes in the tax regime and the economics of tax-free regimes like Italy's flat-tax regime, could potentially have far-reaching implications for the UK's economy and political landscape, especially in sectors like finance, investing, and the property market.
